This article concerns the current trend in marketing whereby corporate are adopting social media as the key form of advertising themselves and their products. The article explores the advantages accruing to a firm that employs social media as the main advertising corporate campaign versus the tradition forms of advertisements. Before the social networking age came along, a firm that wanted to bring out the awareness about its existence relied upon traditional forms of advertisements e.g. newsprint, TV and other traditional medias, public relation, promotions and point of sales activities. In the new age, all that no longer works and companies that want to succeed in their endeavors are using the social media platform.
Customers now want a dialogue with the firms as opposed to the traditional monologue emended in the traditional advertisements. In the current era what counts more for the firm is the number of likes and followers a company has on the social media platform. Old methods such as Gross rating points no longer work; firms employing such methods are most likely to lose out to those using social media. The social media seems to be revolutionizing the way the marketing process proceeds in the present day. The social media seem to have conquered the market’s attention with more people now linking to suppliers through the social media.
Data collected from a research done by Comscore reveals that over 84% of European internet users subscribe to at least one social network; these numbers keep growing. The requirements of social media in terms of time and attention equal those of the traditional media advertisement. This makes social media a worthy competitor of the traditional media in terms of advertisement.
The use of traditional media in the present age increases the chances of the conveyed message not reaching the intended destination. Time formally spent on the traditional media currently shifts to social media. A classic example is the 12% drop in the viewership of the prestigious Oscar awards in 2011. Currently twitter users broadcast their feedbacks and impression about the ceremony live on the social network. Most viewers of the awards have a preference to social interaction and thus air their views through social media since they want dialogue not imposed messages. Research done reveals that the product or service discussed in the various interactive social sites has some direct effects on the level of sales. The movie industry is a good example of how word of mouth (WOM) influences the levels of sales in a company. Words of mouth receive huge emphasis by the presence of social media.
A study carried out on movie releases reveals that success in the industry depends on publicity, advertisement and investment. The study concludes that WOM within the social media has a great positive influence on the box office revenues. This fact does not depend on the level of investments employed in the advertisement process. Owing to these new marketing aspects, most firms are redefining their marketing mix to accommodate social media. According to a survey done by Burson-Marsteller, over 79% of the top-rated 100 fortune five hundred corporate already use twitter, YouTube and face book and blogs in their advertising endeavors.
Social media are slowly becoming an alternative form of advertisement that is replacing traditional forms of advertising. An example is face book banners that act as advertising space and face book pages a channel of interacting with customers. Social media has a completely different set of operating rules from those of the traditional advertisement. A firm may employ social media in building brand recognition or initiating a conversation although the end results are not predictable. WOM has some elements that are similar and others which differ to those in traditional advertising media. Some of these could be analyzed as below.
In terms of reach, traditional media advertising has a larger potential to achieve massive reach. Word of mouth is a one-on-one conversation and due to this nature, it has a limited scope in terms of reach. Nevertheless, social media are transforming the means of interaction expanding it beyond one-one interactions; personal recommendations enable people to conspire to raise the company’s reputation or its products. WOM is more advantageous when it comes to credibility. No advertisement can match the credibility of a personal recommendation. WOM has a tremendous power of influence and persuasion. According to in site consultants, a whopping 38% of the social media fraternity cited WOM as more reliable.
With regards to control, traditional advertisements have control on what adverts will entail. The case is different in social media’s WOM. With the social media, one has to take caution in order to discourage negative feedback comments from customers.
WOM has direct immediate interactions advantages over the traditional forms of advertisements. Negative feedbacks can be controlled by joining in the conversations and deflecting or making amends. A good example here is Dell; the firm failed to respond to comments by thousands of complaining customers thus lost some goodwill. The study on movie releases concentrated on determining whether e-WOM serves as a complement or substitute to conventional mode of advertising. With a random sample of 272 movies released in the years 2002-2006 ranked among the best 25 in terms of receipts, a close direct relationship between advertising and investment got discovered. However, a zero link exists between the existing level of advertising expenditure and the level of e-WOM the movie generated. Only an indirect positive correlation got discovered. Advertising merely help boosts social media presence and the presence stimulates conversations in the social platform.
Most companies tend to think that the use of social media as a tool of advertisement cuts the firm’s budgets. In a few isolated case e.g. Subaru XV launch in Chile, this works but not always. One may be tempted to think that social media is an easy way out when it is not. Although the cost of attracting attention is low, cost of generating captivating content is high and demands time and loads of creativity. While social media may be perceived as a step towards a new ecosystem, it is not that obvious; some companies learn the hard way e.g. Pepsi. The firm invested heavily into social media only to be relegated to an embarrassing 3rd rank in terms of sales.
In conclusion, e-WOM may be a worthwhile alternative for firms that do not have advertising budgets, small businesses and exclusive online operating firms. There are several precautions that any firm that wishes to endorse e-WOM should consider. First, they should be aware that their products are raising debates on the social media that have potential impacts on the products. The firm must then carry out a brand audit to make sure the product has sufficient target group and ability to withstand social media pressure. Another precaution would be to set targets and goals that the web should achieve for the firm. Some possible goals would be: luring customers, gathering customers’ feedbacks etc. The next step would be to choose the appropriate mix, that is, decision on the platform, message types and frequencies to employ.
Guillermo Armelini, Julián VillanuevA. "Adding Social Media in the marketing mix." THE POWER OF WORD OF MOUTH (2010).